Online Credit Card Protection

October 20, 2010

Credit card fraud is one of the most common forms of identity theft reported in the United States each year. Here are five strategies you can use to help protect and monitor your credit card number online.

1) Virtual Credit Card NumbersSome of the best credit cards for shopping online offer virtual account numbers that help you keep your credit card information hidden. These account numbers are usually only good for one purchase, and stop working once you use them. Typically you login to your credit card website, like Discover or Citibank, and request a virtual account number, which you then use to complete your purchase.

Another online payment alternative that can keep your credit card number hidden from the merchant is to use a third-party payment provider, such as Google Checkout or PayPal. Not every merchant accepts these methods of payment, in which case a virtual number may be your only choice.

2) Online BillpaySome people are still wary of online billpay because you’re accessing your bank account online but it’s much more difficult for someone to hack into your bank account than it is to steal your mail out of your mailbox. If you receive and pay your credit card bill electronically you don’t have to worry about people swiping your paper statement and stealing your credit card information.

Although it’s not an online threat, one thing worth mentioning are the credit card offers you get in the mail. Often times they will have information pre-populated to make it easier for you to fill them out. It’s helpful if you decide to apply but if you just toss it in the trash then someone has access to a credit card application with your name and address already filled in. Be sure to shred these.

3) Beware PhishingEven though having your credit card bill delivered electronically can be useful, you have to be vigilant about the emails that arrive in your inbox. Identity thieves have discovered a technique known as phishing to be very effective at stealing your account numbers, passwords and other personal information.

Be wary of emails that ask you to click through to a page. Although it may appear to be a page on your credit card company’s website that you end up on, it could be a fake site website that’s trying to trick you into giving up your login information.

A good rule of thumb is to never click on links inside of an email. Instead you can open a new browser window, type in the official home page, and login from there.

4) Online AlertsMany credit card companies now offer alerts via email or text message to help you monitor your spending patterns. They offer a variety of criteria, for example, you can get an email if there’s ever a charge over a certain amount on your credit card. These alerts can tip you off to credit card fraud early enough to help you put a stop to the spending before it gets worse.

5) Credit Card Statement ReviewThis one is simple but effective. Check out your activity on your credit card statements every month and look for purchases you haven’t made. Companies like American Express have made your online credit card statement pretty interactive so you can easily search and sort your purchases and keep an eye out for ones that aren’t yours.

Most credit card companies offer purchase protection that shield you from liability in the event your credit card number is stolen and misused. However, these companies do ask that you monitor your card activity and report anything suspicious right away so be sure to check your statements.

New Credit Accounts

The five strategies above can help you protect your current credit cards, but something else you want to watch out for are identity thieves opening lines of credit in your name. If someone has enough information about you, it can be difficult to prevent them from posing as you and opening credit cards under your social security number. However, there are two ways you can keep an eye out for new cards that pop up in your name.

Credit Report ChecksThe first way that you can catch credit card identity theft early on is to regularly check your credit report. Look for any credit accounts that you didn’t open. You are entitled to three free credit reports yearly (one from each of the major bureaus), you can access your free reports via Annual Credit Report website.

After you have used up your free reports, you can usually get reports from the major bureaus for between $15 and $50 (depending on whether you get a three-credit report, and include a credit score).

Credit Monitoring ServicesThe benefit of a credit monitoring service is that it will regularly check your credit reports on your behalf and notify you if something comes up. Credit monitoring services usually cost between $9.99 and $29.99 a month, and provide a range of services. Credit monitoring services alert you when suspicious activity occurs, and will let you know when accounts are opened in your name.

Bottom line: It is impossible to completely prevent identity theft. However, with some vigilance, it is possible to reduce the possibility of it happening to you and limit the amount of damage if it does.

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Miranda writes about personal finance almost every day. An experienced freelance writer, she's covered your money online and in print from every angle and is always looking for new ones.

Comments

5 Responses to Online Credit Card Protection

That is so true about it being harder to steal a creit card number online than to steal it through from your mailbox. All someone has to do is grab a bunch of flyers, go door-to-door distributing them, and pick up your credit card statement along the way.

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About Ben

I'm Ben Edwards and I've been addicted to personal finance since I was 12 years old.

That passion for money has paid off for my family - so in 2006 I founded Money Smart Life to help you afford the life that you want. Read My Story...